JUDGMENT
S. Dasaradharama Reddy, J.
1. This is a petition to wind up the respondent-company on the ground that it has not paid the admitted balance amount of Rs. 27,05,825 being the balance intercorporate deposit payable by it. According to the petition, the respondent-company took from the petitioner company on May 16, 1995, intercorporate deposit of Rs. 100 lakhs for a period of 90 days and pledged 10,72,600 shares held by its shareholders towards security along with consent letters of the shareholders for transfer of shares to the petitioner in the case of default by the respondent-company. The market value of the shares as on May 16, 1995 was about Rs. 1.5 crores. Along with the shares, the respondent-company also furnished a personal guarantee by its managing director for Rs. 1 crore together with a demand promissory note for the like amount and two undated cheques towards repayment of amount and interest for Rs. 1 crore and Rs. 4,84,151, respectively. As the respondent has paid only Rs. 80 lakhs and failed to pay the balance of Rs. 20 lakhs, the petitioner issued reminders and after repeated reminders, the respondent issued three cheques for Rs. 20,00,000, Rs. 6,79,315 and Rs. 26,510 amounting to Rs. 27,05,825, together with overdue interest which were, however, dishonoured. Thereupon, the petitioner took steps for prosecution under section 138 of the Negotiable Instruments Act, 1881, and under section 420 of the Indian Penal Code, 1860, and the proceedings are now pending. In response to the notice under section 434 of the Companies Act, 1956, the respondent-company has not denied the existence of the debt.
2. Notice before admission was ordered. The respondent-company filed a counter-admitting the debt but contended that it is not able to pay the balance amount as the petitioner has not returned part of the shares over and above the balance of Rs. 30 lakhs, in spite of repeated requests, to enable it to raise finances. It also contended that at the time when the shares were pledged, the market value of each share was Rs. 18.50 approximately and subsequently due to a serious decline in the stock market the share value has fallen to Rs. 3 as on the date of filing of the counter, i.e., October 5, 1996. As a result, the petitioner is liable to pay Rs. 120 lakhs as loss in the value of security and the respondent is entitled to set off the said amount and also to counter-claim.
3. The petitioner has filed a reply stating that it has transmitted the shares pledged by the respondent-company as security for transfer on April 2, 1996, and that the respondent has not effected the transfer and that in view of the admission of the respondent that the share value has fallen, the contract of guarantee is frustrated as no security exists as on November 30, 1996, the date of filing of the reply.
4. In support of the averments, the respondent has filed the entire correspondence between the petitioner and the respondent, viz., letter dated September 16, 1995, issued by it to the petitioner, fax message issued by the petitioner to the respondent on November 18, 1995, letter dated November 22, 1995, issued by the respondent to the petitioner, reply dated November 25, 1995, issued by the respondent to letter dated November 22, 1995, and fax messages issued on November 25, 1995, and December 19, 1995, by the respondent.
5. It is thus seen that the plea of the respondent is that it is not able to raise finances as the entire shares worth Rs. 150 lakhs were retained by the petitioner even though a substantial amount has been repaid. It cannot be said that the defence of the respondent is not bona fide. To arrive at this conclusion further evidence is not necessary as the correspondence exchanged itself clearly reveals it. Thus, the petitioner cannot contend that the petition cannot be thrown out at the threshold and that whether the defence of the respondent is bona fide or not has to be gone into after trial. Moreover, the petitioner is not entitled to this discretionary relief of winding up since it has not disclosed in the petition, the plea set up by the respondent. Though the petitioner has filed as many as 25 documents, the crucial documents filed by the respondent which show that the respondent has been repeatedly requesting the petitioner to return the securities, have not been filed. In para. 9 of the petition, it is vaguely stated that the respondent-company in its reply to the section 434 notice had not denied the existence of the debt and also the amounts due to the petitioner and that, however, it has not repaid its debts. It is only in the reply that the petitioner has dealt with this defence set up by the respondent. Even along with the reply, the letter dated March 29, 1996, alleged to have been issued by it has not been filed. As a result of this non-disclosure, the court would have been inclined to admit the petition on the basis of the allegations made by the petitioner which would have in turn damaged the reputation of the respondent-company.
6. For the above reasons, the petition is dismissed without costs. However, it is needless to say that it is always open to the petitioner to recover the money from the respondent in the appropriate forum in accordance with law.